Expectations For Union Budget 2024-25: Will The Budget Deliver?

The countdown to the Union Budget has started and is scheduled to be presented on 23rd July. This event is a perfect point for all Indians to get a gist of the government’s plans in the area of expenditure and taxation. 

Amid the rising costs and global uncertainties, the expectations are high. Whether the budget will include the necessary relief measures that will boost the economy and enhance people’s lives or not is the question that needs to be answered.

The Union Budget is practically a financial roadmap of the government for the year - which shows what is the expected revenue through taxes and how that money would be divided among different areas/sectors such as infrastructure, education, healthcare and social welfare. 

It is believed by experts that this budget will have a focus on job creation, infrastructural development and sectors like railways, defence, agriculture and renewable energy.

Let us now examine in greater depth the expectations of various sectors from the Union Budget 2024-25 and how those needs are addressed by the government.

What Is The Union Budget?

The meaning of the Union Budget is that it shows how much money the government expects to bring in (income), which mostly comes from taxes people and businesses pay. The report also shows how much the government plans to spend (expenses) on things like roads, schools, and hospitals over one financial year (1 April - 31 March). 

The Union Budget consists of the following:

• Revenue budget and 
• The capital budget, each of which is further separated into receipts and expenditures¹.

The revenue budget - deals with the government’s day-to-day spending, such as those on public services, and the government’s earnings through taxes and non-tax sources like government fees and collection of fines. 

The capital budget - emphasises long-term spending like those on infrastructure and long-term loans.

The Ministry of Finance, like a careful planner, puts this budget together. They use past spending and predictions about the future to figure out how much money is needed for different sectors and reforms. This planning starts about six months before the Finance Minister presents the budget to Parliament to ensure everything is well thought out²

So, are the economic survey and the Union Budget the same? 

No, the economic survey (a review of the financial developments of the country) is presented to Parliament usually in advance of the Union Budget.

Here is how the Union Budget works:

• Local government officials send their spending plans to the Ministry of Finance. 
• These plans get checked by senior officials and might be adjusted. 
• Different ministries review the plans. 
• Finally, the Ministry of Finance puts all the plans together, considering how much money is actually available. 
• Once they have a good idea of the spending, they decide how much money each ministry gets and even come up with new programs to help people. 
• If there are disagreements about who gets what, the Union Cabinet or Prime Minister step in to make the final call. 
• After all that planning, they figure out how much money the government will get from taxes and other sources. They even talk to people like farmers and small business owners to make sure the budget works for everyone.

Here is a fun tradition: To keep the budget a secret until it is presented, there is a special ceremony with a sweet dish called halwa! Then, everyone involved in making the budget stays locked up until it is time to tell everyone.

The budget is usually presented at the end of the year in February. However, in an election year, there exists a temporary budget called an interim budget. So, one can say there are 2 types of Union Budget.

This year’s interim budget 2024-25 was presented in February. The goal was to build a strong and developed India by 2047. The current Union Budget date is 23rd July 2024!

Also read: Filing ITR Online Made Easy: Step-by-Step Guide for E-filing Income Tax Return, FY 2023-24 (AY 2024-25) 

Union Budget 2024-25: What People Are Expecting? 

An investment banking company, Goldman Sachs, predicts India will retain its fiscal deficit target of 5.1% of GDP into the forthcoming Union Budget 2024-25³. They expect the government might use it to lay out a big economic plan for the next few years, with a focus on creating jobs.

• One way they see this happening is through a push for more factories, especially those that rely on many workers. This could be a big win for employment. 
• Small businesses might also get some attention, with a possible focus on making it easier for them to get loans. 
• Exports are still important, and the budget might include plans to expand those shiny “global capability centres” that bring in foreign money. 
• Food prices getting a bit crazy? The budget might target the food supply chain to try and keep things under control. This could involve improving infrastructure in rural areas, boosting domestic food production, and building better storage facilities to keep food fresh.

The main focus of the budget will be - providing jobs in manufacturing, MSME credit, and enhancing skills for Indians. 

Let us talk about some recent Union Budget expectations. 

Exciting New Subsidies, Innovative Support Schemes, and Major Investments in Agriculture

In the interim budget 24-25 - the government set aside INR 1.27 lakh crores for agriculture, a little more than last year. 

The upcoming Union Budget 2024-25 might propose a whopping 25% increase in agricultural loans! That could mean up to INR 25 lakh crore available for farmers⁴. 

Speaking of this sector, farmers want an increase in the PM-KISAN instalment amount. Instead of INR 6,000 a year, farmers want INR 8,000! Plus, they have asked to give subsidies directly to farmers through direct benefit transfer (DBT)⁵. 

The buzzword for agriculture seems to be “infrastructure.” People expect to hear about better irrigation systems, new cold storage units, and machines to help sort and grade crops. 

The Associated Chambers of Commerce and Industry of India (ASSOCHAM), which works for the interests of Indian trade and commerce, expects the government to support structural reforms in the agriculture sector⁶. This will offer market access, enhance productivity, and offer farmers income opportunities.

Ambitious Infrastructure Projects: High-Speed Railways to Smart Cities

In the interim budget - the capital expenditure was set at INR 11,11,111 crore, an 11% boost!

The government is expected to spend a lot of money on transportation upgrades, like:

• For railways: INR 2.55 lakh crores⁷ 
• For roads: INR 2.78 lakh crores⁸

Trains are getting a makeover! The government is planning to upgrade rail bogies to Vande Bharat standards, and they are also building three special economic corridors to move stuff around faster and cheaper. This should be a win for everyone: businesses will save money, people will get their deliveries quicker, and the railways will make more money.

The government plans to expand the national highway network by over 6,270 km. This should make passenger and good transportation easier and faster across the country.

Increased Funding For Healthcare In Union Budget 2024-25

The Indian government might expand its flagship health insurance program - Ayushman Bharat. They want to double the number of people covered over the next few years, starting with everyone over 70 years old⁹.

That is not all! The government plans to increase the insurance amount from INR 5 lakh to a whopping INR 10 lakh per person annually. This could be a huge help for folks who need expensive medical care.

Pharma companies in India are expecting a lot from Nirmala Sitharaman’s budget. They expect the government to help develop new medicines. They want things like tax breaks and research funding to create innovative drugs, not just the generic ones India is known for.

Experts say this is important if India wants to keep its title as the “pharmacy of the world.” By developing new drugs, India can offer more affordable options to everyone.

Further, the industry expects the government to bring a robust policy framework that ensures quality healthcare and supports the industry’s growth. The main focus to be on:

• Streamlining GST (goods and services tax) policies
• Funding for research and development
• Reducing import duties on medical devices
• Increased investment in healthcare infrastructure

Exciting News For Entrepreneurs

India Inc. wants the government to shake things up with taxes. The industry expects the government to lower corporate tax rates but in a way that makes the tax system fairer overall. This could mean getting rid of some special tax breaks. 

They also want the government to simplify and rationalise tax systems to improve compliance and promote investment. 

The government is also looking to streamline business regulations to make the process smooth. They want to remove the criminal penalties for over 100 laws, turning them into fines instead¹⁰. This would mean that doing business in India will be easier.

There are also talks of a new tax that targets multinational corporations. The aim is to prevent these entities from hiding their earnings in jurisdictions with low taxes. This new legislation would require them to pay a minimum tax amounting to 15% regardless of where they operate.

It has also been proposed by the Department for Promotion of Industry and Internal Trade that the government remove angel tax on startups.

Must read: Understanding Tax Planning 

New Housing Schemes And Enhanced Social Security For Marginalised Communities

The government has been busy building houses, especially in rural areas – they have built 26 million houses since 2016!  In the upcoming budget, they might focus on slum redevelopment¹¹ 

They might also focus on:

• Reducing regulatory or registration costs 
• Making the approval process quick and smooth and 
• Clean drinking water for all in rural and urban areas. 

Affordable housing, especially eco-friendly housing, needs to be a top priority for the country. The government needs to figure out a way to help developers build more affordable green homes.

The government should work to upgrade the PMAY-U 2.0 scheme that focuses on getting houses to the people who need them most and paying builders on time.  Everyone hopes the budget will give us a clear roadmap to achieving “Housing for All” – a safe and affordable place to live for everyone in India.

Major Announcements On Renewable Energy, Environmental Protection And Climate Action

In the interim budget 2024 - the government has made some announcements to meet its commitment of ‘Net Zero’ by 2070:

• They plan to set up coal gasification and liquefaction capacity 
• They will make it mandatory to blend CNG, PNG and compressed biogas 
• They will offer financial assistance for the procurement of biomass aggregation machinery 
• Adoption of e-buses for public transport network 

With the help of the rooftop solarisation scheme - the government will also enable one crore households to obtain up to 300 units of free electricity per month. 

How The Budget Will Affect Daily Life?

Salaried taxpayers have high expectations from the upcoming Union Budget 2024-24. They expect the government to offer relief to people in lower income brackets. 

They want the government to increase the basic exemption limit under both tax regimes. This will provide relief from rising living costs and inflation. When it comes to deduction - speculations suggest that the standard deduction limit might be increased from INR 50,000.

The budget might also include an increase in the amount you can deduct from your taxes for health insurance premiums. This could be a lifesaver if you or someone in your family needs medical care.

An increase in the tax exemption limits will help middle-class taxpayers navigate increasing inflation in household items and the rising cost of living, especially in Metros.

Overall, the goal is to make life a little easier for middle-class families. With everything costing more these days, a little extra tax break could go a long way. Let us see what the budget actually holds!

You may also like: What Is Direct Tax? Definition, Benefits And Types Explained 

Conclusion

From job creation and infrastructural development to substantial investments in agriculture, healthcare, and renewable energy, the proposed measures indicate a comprehensive approach to address the multifaceted challenges facing the nation. Additionally, sectors like tech, housing, and social security can receive significant investments that could bring about transformative changes in the lives of many Indians. 

As we move closer to 23rd July, the Union Budget will answer pressing questions about the government’s strategies and priorities. 

Will the budget deliver the much-needed relief measures and economic stimuli? Will it effectively balance growth with sustainability and equity? These are the critical questions that will soon be addressed, shaping the economic landscape of India for the coming year.

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FAQs

1. What is the date of budget 2024?

The date when this year’s Union Budget will be presented is 23rd July 2024. The Finance Minister will present it. The government’s plan for the economy will be outlined in the budget. In essence, how the government will earn revenue and how it will spend it across the sector and development of the economy.

2. What are the key points of Budget 2024?

Job creation will be at the heart of this year’s budget as well as improving infrastructure like roads and bridges.

Along with that, there can be significant investments in critical areas such as:

• Agriculture, 
• Healthcare, and 
• Renewable sources of energy

The government also intends to provide affordable homes for everyone and give them social security benefits.

3. Which sector will benefit from the budget in 2024?

India’s upcoming budget is expected to:

• Prioritise job creation
• Boost rural economy
• Support labour-intensive industries 
• Provide credit to micro, small and medium enterprises (MSMEs) 
• Invest in agricultural infrastructure
• Address challenges like unemployment and inflation.

References:

1. India Budget <https://www.indiabudget.gov.in/doc/Budget_at_Glance/bag1.pdf> 
2. Union Budget <https://www.indiabudget.gov.in/> 
3. The Economic Times <https://economictimes.indiatimes.com/news/economy/indicators/union-budget-2024-goldman-sachs-forecasts-golden-fiscal-future-for-india/articleshow/111577987.cms> 
4. Money Control <https://www.moneycontrol.com/news/business/budget/exclusive-union-budget-may-increase-agri-credit-target-up-to-rs-25-lakh-crore-for-2024-25-12764281.html> 
5. Economic Times <https://economictimes.indiatimes.com/wealth/personal-finance-news/budget-2024-for-farmers-agriculture-industry-wants-fm-to-hike-pm-kisan-installment-amount-from-rs-6000-in-budget/articleshow/111452254.cms?from=mdr>
6. ASSOCHAM <https://www.assocham.org/> 
7. Money Control <https://www.moneycontrol.com/news/business/budget/budget-2024-expectations-live-focus-on-growth-infrastructure-revamp-as-fm-sitharaman-set-to-present-budget-on-july-23-liveblog-12764062.html> 
8. Money Control <https://www.moneycontrol.com/news/business/budget/budget-2024-expectations-live-focus-on-growth-infrastructure-revamp-as-fm-sitharaman-set-to-present-budget-on-july-23-liveblog-12764062.html> 
9. Money Control <https://www.moneycontrol.com/news/business/budget/budget-2024-expectations-live-focus-on-growth-infrastructure-revamp-as-fm-sitharaman-set-to-present-budget-on-july-23-liveblog-12764062.html> 
10. Financial Express <https://www.financialexpress.com/budget/budget-2024-expectations-live-updates-nirmala-sitharaman-to-present-budget-on-july-23-will-it-be-a-pro-people-budget-3546863/> 
11. Financial Express <https://www.financialexpress.com/budget/budget-2024-expectations-live-updates-nirmala-sitharaman-to-present-budget-on-july-23-will-it-be-a-pro-people-budget-3546863/>

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